KAKO IZBRATI PRAVO STRATEGIJO ZA VSTOP NA TUJE TRGE?
When considering the best strategy for entering foreign markets, particularly in the EU and the US, various approaches stand out, tailored to specific business needs and circumstances.
My first business encounter with the U.S. market dates back to 2016 when I embarked on a multi-month project in Chicago after receiving a work visa. As a recent graduate with a master’s degree in International Business, it was then that I first experienced firsthand the significant differences between theoretical knowledge and the reality of the American market. As someone who travels extensively and explores various cultures, this experience surprised me and, in some ways, shocked me, as many of the ideas I had previously encountered seemed somewhat “exaggerated” or unrealistic. As an advocate for ecology and sustainable entrepreneurship, I initially felt a strong resistance in this new environment, which, however, sparked a series of reflections and encouraged me to develop a deeper understanding of their economy and economic structures.
After my initial experience in the U.S., in 2018, I began learning and making my first attempts to enter European markets, ranging from Germany, Austria, Serbia, and Poland to Norway and Denmark (— prior to this, as an economics student, I had only collaborated with Bahrain, Qatar, and Saudi Arabia through an internship at Gorenje). Each market presented new challenges, both legal and formal, but especially cultural ones, which required me to “feel” the market — from understanding how consumers embrace innovations to recognizing how different practices are valued in the business environment (Who collaborates with whom? What values are ingrained in this region? Through which business organization will the market be more open for Company XY?, …).
Since 2016, my business activities, through various collaborations, have intertwined with numerous international connections, which has enabled me to learn how to identify key shifts in business operations both in Europe and the U.S. Consequently, this has helped me in developing various strategies for entering foreign markets. Below are some frameworks, and I hope that my experiences and advice will also be helpful to you in your international ventures!
MARKET ANALYSIS AND STRATEGIC PLANNING
When considering the best strategy for entering foreign markets, particularly in the EU and the U.S., a thorough preliminary market analysis is crucial. This includes understanding the size of the target market, growth potential, consumer behavior, preferences, and trends. For the U.S. market, it is especially important to utilize channels that resonate with the local audience, such as specific social platforms popular in the region (Social Media: TikTok, Instagram, Twitter, YouTube,… Business Platforms: Crunchbase, LinkedIn, TechCrunch, Bloomberg Business, Forbes, LinkedIn, Industry Dive, VentureBeat, …).
MARKET ENTRY STRATEGIES THROUGH VARIOUS ACQUISITIONS (with significant initial capital)
Market entry strategies are diverse and tailored to the specific needs of each company:
- Joint Ventures: This strategy is particularly beneficial for leveraging local knowledge and resources, which can accelerate market entry. It involves sharing risks and rewards with a local partner, facilitating smoother integration into the new market.
- Franchising: This method offers low risk and rapid expansion, as the local franchisee invests capital and assumes most of the operational risks. It is a way to quickly expand the presence of your brand while ensuring consistency in customer experiences.
- Acquisitions: Acquiring a local company provides immediate market presence and an existing customer base. This approach is particularly suitable in markets where local expertise and immediate scale are critical.
- Greenfield Investments: Establishing a new operation from scratch allows for complete control over the subsidiary, but requires significant investments and carries higher risks. It is suitable for companies seeking full control over their foreign operations.
- Turnkey Solutions: In industries where most contracts have similar requirements, many companies now offer turnkey solutions. These products are designed to be seamlessly integrated into any workflow and begin operating immediately. This is an efficient way to secure contracts worldwide, particularly for government projects.
STRATEGIES FOR INDEPENDENT MARKET ENTRY
If you are considering entering foreign markets independently and wish to maintain full autonomy, here are several strategies to help you expand your business:
DIRECT EXPORT: Manage all aspects of exporting yourself, including direct sales to end users, distributors, or wholesale buyers. This approach allows complete control over distribution channels and pricing strategies.
ONLINE SALES: Leverage the power of e-commerce to sell your products directly to consumers. This requires adapting your website for an international audience and potentially localizing content to meet the specific needs and expectations of various markets. → Optimize your website for SEO (search engine optimization) on a global level, using keywords popular in target regions. Ensure localized payment options and support for multiple currencies to facilitate purchases from international customers.
PARTNERSHIPS WITH LOCAL PLAYERS: Even if you want to maintain independence, it can sometimes be beneficial to collaborate with local marketing agencies or logistics partners. These partners can assist in understanding local market conditions and optimizing your operations. → Regularly review and adjust partnership agreements to ensure they remain aligned with your business goals and market conditions. In Europe, small businesses can use the Enterprise Europe Network (EEN) platform, the largest European network supporting SMEs in international business, to find business partners.
PARTICIPATION IN INTERNATIONAL EVENTS AND TRADE SHOWS: Increase your brand visibility and connect with potential customers and partners by participating in trade shows and industry conferences. → Use digital tools to track leads you meet at events for systematic follow-up and further communication. Prepare take-away materials (e.g., USB drives with product information, interactive presentations) that leave a lasting impression on participants.
MARKET TESTING WITH SMALLER SHIPMENTS: Before making significant investments, test the market with smaller shipments. This approach allows you to gather valuable feedback on consumer preferences and adjust your offerings accordingly. → Use data from test sales for A/B testing of different marketing approaches to determine which works best in a specific region.
ACTIVE USE OF SOCIAL MEDIA AND DIGITAL MARKETING: Focus on targeted advertising on social media to reach specific demographic groups most likely interested in your products.
These strategies allow you to enter foreign markets with a clear vision and solid strategy while maintaining a high level of control and flexibility in your operations.
LOCALIZATION AND COMPLIANCE
It’s essential not to overlook localization, which is crucial for success in foreign markets. This includes adapting your marketing strategies, product offerings, and operational tactics to align with local cultural and regulatory norms. A comprehensive localization strategy ensures that your brand is well-received in the target market and compliant with local regulations.
RISK MANAGEMENT AND LEGAL CONSIDERATIONS
Understanding and adhering to local laws, regulations, and standards is extremely important. Additionally, developing a risk management strategy to address potential challenges such as political instability, currency fluctuations, or cultural misunderstandings is essential.
Each of these strategies has its own advantages and suitability depending on your business model, product type, and the specific characteristics of the target market. It is crucial to thoroughly consider these factors before selecting the most appropriate market entry strategy. For more detailed advice and examples, it’s helpful to explore resources like the EU Access2Markets portal, which not only provides insight on navigating trade barriers but also offers comprehensive support for European businesses looking to enter global markets.
When considering expanding your business into foreign markets, it is crucial to choose the right strategies and leverage available resources to find reliable business partners. Whether you are just starting out or looking for ways to improve your international business operations, utilizing trusted platforms and local resources can significantly increase your chances of success. Always be proactive, adaptable, and ready to learn from every new business experience. Feel free to reach out to me for any advice or collaboration opportunities.
Best of luck!
